Czech Republic Proposes Minimum Wage Increase: Government, Unions and Employers Discuss

Czech Republic Proposes Minimum Wage Increase: Government, Unions and Employers Discuss

2024 State Budget Proposal Introduces Wage Increase

In a recent meeting on September 25, representatives from the government, unions, and employers in the Czech Republic deliberated a proposal for the 2024 state budget. This proposal includes a significant point of interest – an increase in the minimum wage. The current minimum wage, last raised on the first day of 2023, stands at a monthly rate of 17,300 Czech Koruna or an hourly rate of 103.80 Czech Koruna.

The Ministry has proposed a 1,600 or 2,100 Czech Koruna increase in the minimum wage by 2024, potentially raising it to either 18,900 or 19,400 Czech Koruna. The objective is to boost the minimum wage to at least 45% of the average wage within the next five years. Marian Jurečka, Minister of Labor and Social Affairs, has expressed his desire for a predictable annual increase in the minimum wage, for the benefit of both employees and employers.

Employers Express Concerns Over Proposed Increase

Despite the apparent benefits for employees, employers have voiced concerns about the potential repercussions of the proposed increase. They argue that an increase in the minimum wage would also increase the guaranteed wage in other wage tariffs, thereby putting pressure on employers. The Czech Republic Industry and Transport Association believes the increase should be a more modest 6%, as the proposals would increase wages by nine or thirteen percent. They suggest a 1,000 Czech Koruna increase instead.

Trade Unions Largely Support the Proposal

The Czech-Moravian Confederation of Trade Unions, in contrast, is almost in alignment with the proposal. They are calling for a minimum wage of 19,500 Czech Koruna. They rejected the notion that the increase would negatively impact the economy. Drawing a comparison with neighboring Poland, where the minimum wage is higher despite a weaker economy, they argue that the Czech economy could withstand a similar or higher increase.

Decision on Minimum Wage Expected in November

The government is set to discuss the budget proposal in detail this Wednesday. However, a decision is not expected immediately. The final decision on the minimum wage issue should be known by mid-November.

The Concept of a ‘Decent Wage’

Meanwhile, experts define a “decent wage” – a wage that provides sufficient financial resources for workers and their households – as 40,912 Czech Koruna gross, or 42,776 Czech Koruna in Prague. However, a significant portion of employees, more than 63% of jobs last year, did not reach this figure. The proposed increase in minimum wage could potentially reduce this gap, providing more workers with a ‘decent wage’.